Jeffrey Stacey of Stacey Muirhead Capital Management updated his investment thesis on Fairfax India Holdings (Canada: FIH.U) at Best Ideas 2023.
Jeff originally presented Fairfax India at Best Ideas 2022.
Fairfax India’s stock price declined 2.6% in 2022, but intrinsic value has increased modestly in Jeff’s judgment. As such, Jeff believes the company is still an attractive investment opportunity.
Fairfax India is an investment holding company whose objective is to achieve long-term capital appreciation by investing in public and private equity securities and debt instruments in India. Fairfax Financial owns 42.2% of shares outstanding, while OMERS owns 14.7%. Management and investment advisory services are provided by Fairfax Financial, which has a successful long-term operating record in India. Some the largest investments made by Fairfax India include the Bangalore International Airport Limited, the IIFL group of companies, Sanmar Chemicals Group, and CSB Bank.
Fairfax India trades at a ~35% discount to book value per share. Jeff considers book value per share as a rough but understated proxy for intrinsic value. Fairfax India has been actively buying back shares to take advantage of this discount, having purchased about 7.6% of shares outstanding since the end of 2020.
Given the above-average long-term growth potential of India, a portfolio of public and private investments with solid economic prospects and reasonable valuations, a market price at a significant discount to both book value and intrinsic value per share, and an active and accretive share repurchase program, Jeff believes Fairfax India remains a compelling investment opportunity.
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About the instructor:
Jeffrey Stacey is the founder of Stacey Muirhead Capital Management Ltd. and he has over 35 years of investment industry experience. Jeff has an Honours Bachelor of Business Administration degree from Wilfrid Laurier University and is a Chartered Financial Analyst.
Jeff has been involved in many charitable and board activities throughout his career. He has served on several investment committees including for two Canadian universities. In addition, he has served on the advisory boards for two university student managed investment funds.
Jeff is married and has two children. Personal interests include hiking, fitness, reading, travelling, and playing drums.The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.
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